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California Home Buyers Can Sue Sellers for Failure to Disclose Defects

Orange County real estate lawyerDisclosure is an important part of the home buying process. Sellers have legal obligations to make certain disclosures about the property to the buyer. Failure to do so can result in civil lawsuits, monetary damages, or even rescission of the sales contract altogether.

Yet disclosing too much unnecessary information can also be problematic for sellers. The advice of a real estate attorney can help sellers determine the appropriate amount of disclosure to make in order to avoid these unpleasant consequences. A Costa Mesa real estate attorney can also help buyers weigh their legal options when faced when dealing with a seller who fails to disclose defects.

What Disclosures Are Required Under California Law?

According to the California Department of Real Estate, required real estate disclosures cover a wide variety of issues. Basic information about the size of the property, appliances included in the sale and the condition of the property must be provided. Sellers must also disclose legal information about the rights of any homeowners’ associations, or any unsettled legal claims against the property.

Certain areas of California are designated natural disaster zones, and this too must be disclosed. This includes special flood hazard areas designated by the Federal Emergency Management Agency, areas of potential flooding, high fire hazard severity areas, designated wildland areas, earthquake fault zones and seismic hazard zones. If a property is located within one mile of a military training area, its seller must disclose the possibility of live ammunition within the vicinity.

These are just a few of the many specific disclosures required by state and federal law. Because the disclosures are so extensive and specific to a property, it is important for sellers to consult with real estate professionals about which ones pertain to their property.

Buyers, too, may be required to meet certain legal obligations when purchasing a house. For example, federal law requires buyers to withhold 10 percent of the purchase price and pay it to the Internal Revenue Service if the seller is a “foreign person.” Many buyers are likely unaware of this requirement. Yet they can still face unpleasant fines and tax consequences if they fail to meet their obligation.

Certain property sales are exempt from disclosure requirements altogether. These include the sale of new homes in a subdivision, foreclosure sales, court-ordered transfers, transfers to a spouse or qualified relative, transfers between co-owners, transfers by the State Controller for unclaimed property, transfers resulting from delinquent taxes, and transfers to or from any government agency. Transfers by a fiduciary (such as the executor of an estate, a guardian, a conservator or a trustee) are also exempt from disclosure requirements unless he or she was a former owner of the property.

Each property sale is unique, and the rights and responsibilities of both buyers and sellers will be determined by the facts of the transaction. The legal advice of a Costa Mesa real estate attorney can protect both buyers and sellers throughout the process of a home sale.

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Dan Carlton and his team are dedicated, down-to-earth, compassionate personal injury attorneys committed to helping victims of traffic accidents, personal injuries, dog bites and more. Serving Los Angeles and the entire Orange County area, including Anaheim, Tustin, Irvine, Garden Grove and Santa Ana, for over 40 years, we have handled thousands of cases.

Daniel C. Carlton